According to a law enforcement source that spoke to Newsweek, there may be a connection with a $12 million Ponzi scam involving restaurateur Hamlet Peralta and an investigation that the FBI is conducting into allegations of corruption at the NYPD. Peralta, who is the purported mastermind of the alleged scheme, has been arrested.

According to a federal indictment, investors thought they were investing in Peralta’s wholesale liquor business. Instead, he used $700K of their funds on liquor and over $11 million to pay earlier investors, purchase spa treatments and cover his other expenses. Peralta purportedly lied when he told investors that he was the owner of the West 125th Street Liquors. (The business belongs to his sister.) One investor gave Peralta over $3.5M.

Peralta is charged with wire fraud. At least 12 investors were allegedly bilked. Peralta is said to have promised them regular interest rate returns that he claimed would come from profits made by his business. Instead, he misappropriated the money.

Now, Newsweek is saying that the liquor scam may be tied to the FBI’s NYPD probe. The FBI is reportedly looking into whether senior members of the police department received gifts in exchange for favors from two businessmen who invested with Peralta.

In other Ponzi scam news, the FBI is charing a Connecticut man with running a $1.5M Ponzi scam that allegedly bilked over ten people. Joseph Castellano faces multiple criminal charges of money laundering and fraud.

Castellano, who is a certified public accountant, offered investment opportunities and financial services to his clients. He allegedly falsely represented to these targets that he had other clients in need of capital but that they couldn’t get the money via traditional means. He promised these prospective investors 6-8% of yearly returns. Through his Casbo Investments, Castellano prepared contracts and documents.

In a press release, U.S. States Attorney Deirdre M. Daly said that none of the investment opportunities that Castellano marketed to clients existed. Instead, he used investor money for himself and to pay other investors their “interest.”